FSA questions Iceland share sale

The Financial Services Authority is making enquiries into the circumstances surrounding the sale of £13.5m worth of shares by Iceland chairman Malcolm Walker.

Walker sold 4m shares between 14 December and 20 December at an average price of 339.13p. On January 22, the frozen-food retailer revealed a slump in sales for the six months to the end of December. The shares have since dropped to 208p.

The FSA has questioned Iceland about the sale. Its rules say company directors may not deal if they are in possession of market sensitive information. The FSA may launch a full investigation.

Iceland said: 'Malcolm Walker is confident that he obeyed all the rules in respect of his share disposal.'

Walker is on holiday in the Maldives until the end of the month. But pressure is intensifying for him to resign. Fund managers, investors and some of his colleagues are furious at the sale.

Iceland's board may also be criticised for approving the sale. The FSA says boards have an obligation not to give clearance to a director to deal if the company is in possession of unpublished price sensitive information.

Iceland sources said Walker believed the firm would have a good Christmas and would meet full-year forecasts, but analysts claim it is obvious that sales had been poor for many weeks.

Walker had been due to revert to a non-executive position by March, but some think he will step down ahead of this.

City sources are also keen to know how much Iceland director Andrew Pritchard knew of the sales position, and how information was passed to the board. Pritchard, finance director at the time of the sale, was made managing director of the food retail business on 8 January when new chief executive Bill Grimsey brought in his own finance chief.

'We don't comment on specific cases, but we look into any suspected breach of the rules,' said the FSA.